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On the same week that Tesla shows off its cross-country “cannonball run,” (aiming to break the transcontinental record for driving an EV from the left to right shore of the U.S. in three days), bad earnings and production news comes from the oil patch. This could be really good news for Tesla and its competitors, among them, the Chevy Volt, the Nissan Leaf, and the forthcoming BMW i3. The more expensive oil gets, the more marginally attractive EVs become.

Fourth quarter earnings are out from Shell and Exxon Mobile and they confirm a trend many have pointed to for a long time: the hydrocarbons may still be there, but they are getting more and more expensive to recover. Both Shell and Exxon pointed to declining output, while at the same time bearing enormous investment burdens (Shell’s 2013 capital spending exceeded $44 bn).

The two majors are not the only companies forced to spend huge amounts of money to develop difficult oil and gas fields across the planet. Fracking notwithstanding, the easy stuff is pretty much gone. Today’s projects typically involve billions of dollars of riskier investments at higher costs, and the potential for enormous cost overruns. OilPrice.com cites the example of Italian oil company which currently forecasts a $50 bn investment in Kazakhstan’s Kashagan oil field – a five-fold increase over initial numbers.

All of which suggests that marginal costs for the production of oil will continue to rise. In the meantime, electric rates are also not without price pressures. The question will be by how much rates increase over time, and whether the current advantage in ‘fueling costs’ enjoyed by EVs will continue to grow. The DOE currently shows an ‘eGallon’ (the cost for the equivalent energy of a gallon of gasoline) at $1.21, compared with an average price of $3.33 for a gallon of gas. Electricity rates would have to rise much faster than gasoline for electrons to lose their economic advantage. Even if electricity were to shoot up by 50% (an additional $.61 per eGallon) while oil increased by only 25% (an additional $.83), there would still be a marginal economic gain for an EV.

Image: cleantechnica.com

But that kind of mismatch is unlikely to occur. With relatively cheap U.S. natural gas-fired generation, and renewables continuing to rapidly decline in cost, there’s a very good chance that the relative cost benefits of fueling an EV will continue to increase significantly. And while fuel is only a small part of the entire cost equation, that’s a great trend to help spur along the adoption of electric vehicles. Tesla's voyage may be pioneering today: it will be commonplace tomorrow.